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S. Arabia, Iraq to Pump Up Jan. Crude Exports to Asia

S. Arabia, Iraq to Pump Up Jan. Crude Exports to Asia

Saudi Arabia and Iraq are set to supply full-contracted volumes of crude to several Asian refiners in January, despite commitments to cut output under a deal signed last week by members of OPEC, refinery sources said on Friday.
The top two producers in the Organization of Petroleum Exporting Countries are looking to defend market share in the fastest growing region for oil demand, even as the group battles a festering supply glut that has hit global prices hard.
Sources at eight refiners in Asia told Reuters they had been notified by state oil giant Saudi Aramco that in January it was set to supply full amounts of crude contracted as part of annual deals, with three to load extra volumes they had requested.
"It's quite telling as there are not only no supply cuts, but they have given extra volumes," a source said, indicating that the move underscored that producers were eager to maintain market share in Asia. Three of the refiners said they had also received full volumes of Basra crude from Iraq's Oil Marketing Company (SOMO).
One buyer in North Asia said Saudi Aramco had agreed to supply his refinery with a volume of Arab Extra Light crude several percent above its contracted amount for next month.
Some of the extra volumes were committed before the OPEC meeting on Nov. 30, when production cuts were agreed.
Energy consultancy PIRA said in a note on Thursday that Saudi Arabia had been informing some customers about cuts to their January crude oil supplies, with larger reductions expected in North America.
"US refiners have received lower nominations. The Saudis are targeting inventory reductions, so it makes sense that the reductions will be in the US and Europe rather than Asia," said another industry source.
OPEC will meet non-OPEC nations in Vienna on Saturday, seeking their help in boosting crude prices.
It hopes producers outside the 13-nation bloc will add another 600,000 barrels per day in cuts on the heels of the landmark deal amongst members of the exporting group to cut production by around 1.2 million barrels bpd beginning in January.